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Some cite the risk of fraud being perpetrated on unwitting investors, but I don't think that fraud the real threat to the ongoing viability of the industry.

The real threat is a potential dearth of returns commensurate with the illiquidity and high risk of equity investments in very early-stage technology companies.

The number of high quality, successful early stage technology companies that are "investable" by equity crowdfunding participants will be extremely small.

Secondly, crowdfunding stage investors will likely be diluted as the few companies that do gain traction require significantly higher investments in follow-on rounds from established venture capital firms and other professional sources. This occurs to Angel investors as well.

Lastly, given the high death rate of early stage startups, successful equity crowdfunding investment will require a portfolio theory approach with many investments spread out among the startups.

Most early-stage crowdfunding investors will probably not have the time or inclination to spread their risk among a large enough portfolio, probably on the order of 30-50 investments.

As a result, I foresee comparatively unexciting returns for a large portion of equity crowdfunding investors. A few will have great success, but the vast majority will not, due to a variety of reasons.

"Democratizing" investment is a nice concept in theory, and it will certainly increase the amount of funds available to entrepreneurs, but whether it results in an investment return commensurate with the risk and illiquidity of tiny investments in early stage startups will determine the long term viability of the industry.

Deriving his figures from data from the Bureau of Labor Statistics, the punch line is compelling: "During the 90s, newly birthed businesses came with six new jobs. By 2007, they came with four." That comes out to a reduction of 33% in new job creation from this critical source of economic growth.

Unfortunately for the reader, Rines doesn't offer any insight as to why this is the case. My own take is that it may be a function of the shift to more services and technology-oriented new businesses being formed.

As software "eats the world", service companies can accomplish more business activity with fewer employees, relying on technology has a force-multiplier of their efforts.

Rines sees the trend continuing. I foresee that labor-intensive manufacturing and construction oriented industries will continue to dwindle in significance during the coming years as the US proceeds along its services-focused economic path.

If so, an even greater number of startups will need to be created to help the economy return to robust growth.

As part of VentureDeal's expansive coverage of technology startup company financing deals, we track the nascent equity crowdfunding industry in North America.

Equity crowdfunding portals are those that directly facilitate equity investments in startup companies, contrasted with other crowdfunding portals which enable end users to pre-purchase upcoming products, such as Kickstarter. These portals perform due diligence on startups as well as certify investors as accredited according to SEC guidelines.

Current Status

The industry received a big boost recently when the SEC finalized regulations regarding general solicitation to accredited investors and proposed rules (PDF) about soliciting to unaccredited investors (quick summary of proposed rules). Crowdfunding portals are anxiously awaiting final rule promulgation to allow issuer startup companies to generally solicit to all classifications of investors.

Equity crowdfunding portals in North America that are generating significant volume are relatively few, as the industry is still in its infancy. Below is a listing of the top technology equity crowdfunding entities that VentureDeal tracks, in rough order according to volume:

AngelList - AL operates a crowdfunding portal that provides both private and public fundraising options for technology startups in major cities in the United States.

RockThePost - RTP is based in New York City and has raised nearly $24 million in crowdfunding financing via its online portal.

MicroVentures - MV has been raising financing for startups for several years and also operates as a broker-dealer.

SeedInvest - advised by the main proponents of crowdfunding legislation, SeedInvest has a strict vetting process for startups that it chooses to promote.

WeFunder - founded in Boston, MA, the portal enables individuals to invest as little as $1,000 per deal and includes a variety of technology and consumer-oriented startup companies.

Fundable - The portal provides the options for startups to raise either equity or "rewards" based financing and includes a variety of technology and consumer startup investing opportunities.

FundersClub - This San Francisco-based site describes itself as an "online venture capital firm" and does not perform "equity crowdfunding" per se, but does aggregate investors online for technology startups.

Crowdfunder.com - Based in Venice, CA - Crowdfunder.com has developed a portal to invest not only in technology startups, but also social enterprises and film & entertainment ventures.

Polliwog - focused on healthcare startups, Polliwog enables investment in individual life science companies or via its publicly-registered funds with a minimum investment of $5,000.

The above-listed sites generally include the same types of information on each deal, such as company description and outlook, deal terms, documents and disclosures and the ability to communicate directly with startup principals.

A number of service providers have emerged to help portals and issuer startups with the various requirements promulgated by the SEC, such as escrowing of investment funds, due diligence, bad actor research, financial statement certification, etc.

To date, industry-wide statistics on aggregate funding amounts have been impossible to obtain, no doubt in small part due to the "private" nature of many of the fundraising campaigns. Additionally, there are no aggregate numbers on investment successes, if any, that can be translated into rates of return on equity.

Crowdfunding, if it is to remain a viable option for entrepreneurs and investors alike, must communicate its results to the market. For the industry to grow over the long-term, it will have to demonstrate that investors are receiving an adequate return for their risky, illiquid investments. Otherwise it risks investor suspicion and fatigue.

Successful Internet investor Fred Wilson of Union Square Ventures tipped his hand on where he sees the next Internet revolution happening.

It's the "blockchain". As in, the Bitcoin blockchain.

In a new blog post, he describes the current investment downturn in mobile as indicative of a typical investment cycle.

More importantly, he mentions:

"And our 2014 fund will be built during the blockchain cycle."

Bitcoin is not just about financial technologies. The real innovation is the blockchain, which VCs believe may be the foundation for the secure, low cost transfer of digital goods, potentially opening up new business models, industries and unlocking efficiencies in the digital realm.

I know, food is hot these days. Marketplaces are even hotter for venture capital investors.

So put the two together and what you have now is Kitchensurfing getting $15 million at a rumored $40 million valuation for its marketplace for private chefs.

They have some top tier investors, such as Union Square Ventures, so that says at least something about their model.

But I really wonder if they will be able to continue their growth past the "chasm"?

The "chasm" refers to market adoption between the early adopters (who appear to be adopting the service, or at least trying it out) and the wider consumer market.

I don't see it happening.

In a world that is struggling economically, even the richest industrialized nation, the United States has 47 million people on food stamps and 57% of the population (in a recent poll) believes we're still in a recession.

We will soon find out just how small of a niche these marketplaces will be able to service and still justify their investment and valuations.